Vande Bharat Trains To Get PLI Boost as Indian Railways Looks To Reduce Import Dependence: Report
Moneylife Digital Team 16 August 2023
Vande Bharat trains will increasingly have indigenous components, with the Union government looking at a new production-linked incentive (PLI) scheme for train parts. In a bid to attract foreign manufacturing firms and lessen import reliance, the government is set to roll out a PLI scheme for train component manufacturers, says a report.
According to the report from Economic Times (ET), for imported products, the government offers output-linked incentives through the PLI programme. "The Indian Railways, one of the world's biggest transporters, has 28 types of passenger coaches but the government plans to reduce them to two—Linke Hofmann Busch (LHB) and Vande Bharat."
The import component in LHB coaches, introduced in 1999, is around 1.5%, but in the Vande Bharat trains it is estimated to be about 15%, the report says, adding the PLI scheme being considered for the railways is in line with the government's plan of having only two types of passenger coaches in Indian Railways—LHB and Vande Bharat--down from 28% at present.
Quoting an official, ET says, "The focus will be on assessing the export potential of Vande Bharat trains and measures required to ensure localisation of components used in the train."
Local manufacturing of components will also help lower these coaches' maintenance costs.
"This PLI programme will incentivise setting up of new manufacturing units, or expanding existing ones to supply coach and engine parts that are otherwise imported," the official told the newspaper.
So far, the Union government has announced PLI programmes in 14 key sectors, including auto components, automobile, aviation, chemicals, and electronic systems, among others.
As on 28 July 2023, 50 Vande Bharat train services are running on the Indian Railways, connecting states having board gauge (BG) electrified networks. Ashwini Vaishnaw, minister of railways, told the Lok Sabha that the introduction of trains, including Vande Bharat services, is an ongoing process on Indian Railways subject to operational feasibility and traffic justification.
"India's first-ever indigenously designed and manufactured semi-high speed Vande Bharat trains has provided a modern and comfortable rail travel experience to passengers. High Speed, enhanced Safety standards and world-class Service are the hallmarks of this train," he added.
Meanwhile, the cabinet committee on economic affairs (CCEA) chaired by prime minister Narendra Modi on Wednesday approved seven projects of the ministry of railways with an estimated cost of around Rs32,500 crore, with 100% funding from Union government. The proposals of multi-tracking will ease operations and reduce congestion, providing the much-required infrastructural development on the busiest sections across Indian Railways.
The projects cover 35 districts in nine states, Uttar Pradesh, Bihar, Telangana, Andhra Pradesh, Maharashtra, Gujarat, Odisha, Jharkhand, and West Bengal will increase the existing network of Indian Railways by 2,339kms and will provide employment of 7.06 crore man-days to the people of the states, the government says.
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